This paper analyses the methodology developed by Behrens and Murata (2007) to introduce variable mark-ups into models of monopolistic competition. Their risk- aversion explanation to the presence of ¯xed mark-ups in the Dixit and Stiglitz (1977) model is validated; however, we show that their...

This paper analyses the methodology developed by Behrens and Murata (2007) to introduce variable mark-ups into models of monopolistic competition. Their risk- aversion explanation to the presence of ¯xed mark-ups in the Dixit and Stiglitz (1977) model is validated; however, we show that their...

Despite substantial regional expenditures at both national and community level, European regional policies do not appear to deliver. The evidence suggests that neither efficiency gains nor reduced regional inequalities are attained. If there is any positive impact at all, then it is at the most...

An inconsistency is found in the demand side of the NEG models developed in Pflüger (2004) that follows from the absence of a non-negativity constraint on the consumption of agricultural goods. This seriously weakens the results of the original paper and those of ensuing contributions in...

Models of the new economic geography share a number of common conclusions, but also exhibit notable differences, in particular with respect to the shape of the location pattern and the efficiency of the market equilibrium. This reflects the fact that these models rely heavily on specific...

An inconsistency is found in the demand side of the NEG models developed in Pflüger (2004) that follows from the absence of a non-negativity constraint on the consumption of agricultural goods. This seriously weakens the results of the original paper and those of ensuing contributions in...

This Paper analyses the interaction of economic integration and some typical regional policies in a new economic geography model with three regions of different size. The policies analysed are when the government controls the location of industry through location permits, infrastructure...